Barclays will plunge to a £100m loss for the third quarter after revealing it has been forced to make a further £700m provision against the cost of compensating customers allegedly mis-sold payment protection insurance.

In a surprise statement to the market, Barclays said “higher than previously anticipated” PPI claims meant it would now have to set aside a total of £2bn to meet the compensation costs.

Taken on top of a £1.1bn charge Barclays said it expected to take against the value of its own debt, the lender will now report a loss of about £100m for the three months to the end of September when it published its third quarter results on October 31. Excluding the own debt charge and the new PPI provision, Barclays would have made a pre-tax profit of £1.7bn.

The results will be the first presented by new chief executive Antony Jenkins, who was promoted to post following Bob Diamond's departure in the wake of Barclays' admission it had attempted to manipulate Libor.

Barclays shares lost more than 2pc of their value on the back of the announcement and are currently trading down about 3pc for the day.